Good to Great Why Some Companies Make the Leap...And Others Don't by Jim Collins

Index

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A&P, 8, 65, 86, 141, 148, 157, 250, 259
Doom Loop behavior of, 254
family domination of, 67–68
Forbes’s description of, 67
Golden Key experiment of, 68
Kroger compared with, 65–69, 66, 141

Abbott Laboratories, 8, 141
in acquisitions analysis, 259
“best in the world” understanding of, 101
Blue Plans of, 173
Cain’s tenure at, 30–31
comparison candidates for, 7–8, 229
culture of discipline at, 122–23
economic denominator insight of, 106
executive interviews at, 239
good-to-great performance of, 7
industry performance and, 252
inside vs. outside CEO analysis of, 249
“no miracle moment” in transition at, 170
short-term pressures and, 173–74
technology accelerator of, 150
Upjohn compared with, 98–99, 173–74, 174
see also Cain, George

acquisitions, 11
good-to-great study unit on, 241–42
misguided use of, 180–81

Addressograph, 8, 86, 250, 259
Doom Loop behavior of, 254
Pitney Bowes vs., 70–72, 71

Aders, Robert, 81–82
“Adventure of Silver Blaze, The” (Doyle), 10
Airbus, 203
Aldinger, Bill, 43

alignment, 11
Flywheel and, 176, 177–78, 187
Level 5 Leadership and, 177–78

Allegheny, 48, 258
Allen, Bill, 203
Allen, Fred, 28, 133–34

see also Pitney Bowes
Amazon.com, 146, 154
American Express, 188
American Home Video Corporation, 94, 255
Amgen, 120, 122
Aminoil, 135
AND, genius of, 198–200
AOL, 158
Appert, Dick, 59, 62
Apple Computer, 158
Arbuckle, Ernie, 42
Armacost, Sam, 43
Ash, Roy, 70–72, 74
AT&T, 134
Auchter, Dick, 59
Aycock, David, 76



Bagley, Brian, 189
Bankers Trust, 43
banking industry, 42–44, 78, 104, 105, 128
Bank of America, 8, 72, 78, 250, 260

Doom Loop behavior of, 97, 128–29, 254
layoffs at, 53–54
“weak generals, strong lieutenants” model of, 43
Wells Fargo vs., 43–44, 44, 53–54, 86, 128–29
Barbarians at the Gate (Burrough and Helyar), 109
bar code scanners, 148–49
Berlin, Isaiah, 90–91
“best in the world” question, 95, 96, 97–103, 118
Bethlehem Steel, 8, 34, 78, 86, 138, 139, 167, 250, 259
Doom Loop behavior of, 255
technology and demise of, 156–57
Bezos, Jeff, 154
“biggest dog” syndrome, 26
Big Hairy Audacious Goals (BHAGs), 197–204
Biographical Dictionary of American Business Leaders, 236
blame, 77–78, 88
Blue Plans, 173
board of directors, 216
Boeing, 6, 109, 158, 202–4
Boyd, Joseph, 181
Breaking the Bank (Hector), 43, 129
Bressler, Marvin, 91

Briggs, William P., 212
Bruckart, Walter, 55
brutal facts, 65–89, 161

charismatic leadership and, 72–73, 89
clock building idea and, 199
and conducting autopsies without blame, 77–78, 88
core ideology idea and, 199
dialogue, debate and, 75–77, 88
discipline and, 126
faith and, 80–85
genius of AND idea and, 199
hardiness factor and, 82
Kroger’s rise and, 65–69, 70
and leading with questions, 74–75, 88
motivation and, 73–74, 75, 89
preserve the core/stimulate progress idea and, 199
red flag mechanisms and, 78–79, 88
short pay device and, 79–80
Stockdale Paradox and, 83–87, 88
budgeting, 140, 143
Buffett, Warren, 42, 97
Built to Last (Collins and Porras), 14, 188
Built-to-Last study:
clock building idea in, 197
core ideology idea in, 198
genius of AND idea in, 198
level 5 leaders’ relationship to ideas of, 198
preserve the core/stimulate progress idea in, 198
research methods of, 188–89
role of, in Good-to-Great study, 189–90
bureaucracy, discipline and, 121, 142
Burgelman, Robert, 213
Burger, Ralph, 67–68
Burroughs, 8, 130, 130, 234, 250, 260
unsustained performance of, 256–57
Business Week, 28, 70, 130, 131, 132, 167, 178, 236
Cain, George, 28, 30–31, 99
see also Abbott Laboratories
Camel, 58
Cederberg, Scott, 159
CEOs:
good-to-great analysis of, 243–44
see also executives
change, 11
acting on need for, 56–58, 63
induced by technology, 147–48, 155
character traits, 51–52, 64
charismatic leadership, 72–73, 89, 216
Charles Schwab, 254
Charlotte News and Observer, 214

Chirikos, Anthony, 30
Chrysler, 8, 82, 153, 234, 250, 260

Iacocca’s tenure at, 29–30, 31, 131–33
unsustained performance of, 257
Churchill, Winston, 65, 73, 86, 154
Statistical Office of, 73
Circuit City, 8, 33, 57, 126, 172, 227, 256
in acquisitions analysis, 259
“best in the world” understanding of, 101
CEO analysis of, 249
comparison candidates for, 230
economic denominator question and, 106
executive interviews at, 239
Forbes profile of, 166
good-to-great performance of, 7, 74
industry performance and, 252
investment in, 167
in media, 166
“no miracle moment” in transition at, 170
Packard’s Law applied by, 55–56
technology accelerator of, 150
see also Wurtzel, Alan
Cisco Systems, 216
Citicorp, 97, 188
clock building idea, 197, 198–200
Coca-Cola, 4, 6, 18, 91, 107, 134, 149, 150, 166, 227
coherence, principle of, 182
Columbia Pictures, 189
compensation:
executive, 10, 49–50, 64, 244–46
good-to-great analysis of, 244–46
nonexecutive, 50
Nucor’s system of, 50–51
CompuServe, 158
Computerworld, 182
Congress, U.S., 25
Coniston Partners, 23
Cooley, Dick, 42, 45, 171
Cooper, Jenni, 94
Cooper, Sidney, 55–56, 256
core competence, 99–100, 118–19
core ideology, 193–96, 196, 197, 198–200
of Disney, 195–96
of Hewlett-Packard, 193–94
of Merck, 194
Corky’s, 32
Corporate Products Committee, 116
Council mechanism, 114–16, 200, 217
characteristics of, 115–16
CPC, 227

Crisis in Bethlehem (Strohmeyer), 138
Crocker Bank, 52–53, 254
Cullman, Joseph F., III, 28, 37, 58, 62, 77–78

self-assessment of, 34
Weissman decision of, 58–59
see also Philip Morris
culture of discipline, see discipline
Cutting Edge (McKibben), 37
Cyclops, 256



Daimler-Benz, 30, 257
Darwin, Charles, 91
DEC, 181
De Havilland, 158
Dell, 158
Development of American Industries, 236
discipline, 120–43, 161, 207, 217

Abbott’s culture of, 122–24
and adhering to Hedgehog Concept, 133–39, 142
budgeting and, 140, 143
bureaucracy and, 121, 142
clock building idea and, 200
core ideology idea and, 200
freedom and responsibility within, 123, 124–26, 142
genius of AND idea and, 200
Hedgehog Concept and, 123–24, 126
Level 5 Leadership and, 130
matrix of, 122
Nucor’s culture of, 136–39
Pitney Bowes’s culture of, 133–34
preserve the core/stimulate progress idea and, 200
Responsibility Accounting and, 123
“rinsing your cottage cheese” factor and, 127–29, 142
start-ups and, 120–21
“stop doing” list and, 124, 139–41, 143
within Three Circles, 123–24
tyrannical, 129–33, 142
Wells Fargo’s culture of, 128–29
Dively, George, 181–82
Dixons, 256
Doom Loop, 14, 178–84
in direct comparisons, 254–56
at Harris, 181–82
and leaders who stop the flywheel, 181–82
and misguided use of acquisitions, 180–81
signs of being in, 183–84
at Warner-Lambert, 178–80, 256
Drucker, Peter, 180
drugstore.com, 144–47

Duffy, Duane, 86
Dunlap, Al, 28–29, 31, 256



Eckerd, Jack:
“Cork” Walgreen compared with, 46–47

Eckerd Corporation, 4, 8, 46, 92, 93–94, 95, 250, 259
Doom Loop behavior of, 255

economic engine question, 95–96, 96, 104–8, 118, 119
Economist, 236
Einstein, Albert, 91, 112–14

as Time’s “Person of the 20th
Century,” 154
Electric Kool-Aid Acid Test, The (Wolfe), 41
Eli Lilly, 178
Ericson, Jim, 155
Ernst, Joanne, 116–17
Everingham, Lyle, 28, 68, 170, 209
see also Kroger
Excel, 158
Executive Council, 116
executive interviews, 239–41
executives, 41–64
assigned to best opportunities, 58–60, 63
character traits as key to hiring of, 51–52, 64
compensation of, 10, 49–51, 64, 244–46
“first who” principle and, 42–45, 50, 62, 63
“genius with a thousand helpers” model and, 45–48, 63
layoffs of, 53–54
need for change of, 56–58, 63
Packard’s Law and, 54–55
personal cost to, 60–61
post-retirement role of, 61–62
rigor needed in decisions on, 44–45, 52–60, 63
turnover pattern of, 57
“weak generals, strong lieutenants” model for, 43



facing reality, see brutal facts
faith, 80–85
Fannie Mae, 6, 8, 227

in acquisitions analysis, 259
“best in the world” understanding of, 101
CEO analysis of, 249
comparison candidates for, 230
economic denominator question and, 106
executive interviews at, 239
good-to-great performance of, 7
Great Western compared with, 111–12, 113
industry performance and, 252
investment in, 172–73

Maxwell’s tenure at, 25–26, 45, 82–83
motivation at, 110
“no miracle moment” in transition at, 170
technology accelerator of, 150, 152
“first who” principle, 152, 207
clock building idea and, 199
core ideology idea and, 199
for executives, 42–45, 50, 62, 63
genius of AND idea and, 199
at Hewlett-Packard, 191–92
preserve the core/stimulate progress idea and, 199
and shortage of quality people, 216–17
Flywheel, 14, 164–78
alignment question and, 176, 177–78, 187
buildup and breakthrough model of, 165–71
clock building idea and, 201
coherence principle and, 182
core ideology idea and, 201
“flywheel effect” and, 174–78
genius of AND idea and, 201
leaders who stop, 181–82
perception of, 165–69, 186
preserve the core/stimulate progress idea and, 201
short-term pressures and, 172–74, 187
signs of being on, 183–84
as wraparound idea, 182
Forbes, 24, 58, 94, 236
A&P as described by, 67
Chrysler’s failed Maserati venture in, 132
Circuit City profiled in, 166
on dotcom phenomenon, 145, 146
on Kimberly-Clark’s success, 169
Mockler in, 24–25
Singleton in, 48
Ford Motor Company, 43, 195
Fortune, 26, 70, 131, 167, 220–21, 222, 236
Fortune 500 rankings, 6, 28, 35, 47, 136, 211, 212, 219, 220
Fortune 1000 list, 177
“4–S” model, 101
Frankl, Viktor E., 86, 120
freedom, responsibility and, 123, 124–26, 142
Freud, Sigmund, 91



Gandhi, Mohandas K., 154
Gates, Richard, 131
Gault, Stanley, 26–27, 31, 130–31
General Electric, 3, 4, 6, 18, 33, 91, 158, 166, 188, 215

Hedgehog Concept of, 215–16
General Mills, 227

General Motors, 65
genius of AND, 198–200
“genius with a thousand helpers” model, 45–48
G.I. Joe (doll), 108, 257
Gillette, 8, 57, 61, 83, 141, 152, 172, 178

in acquisitions analysis, 259
attempted takeover of, 23–24
“best in the world” understanding of, 102
CEO analysis of, 249
comparison candidates for, 230
difficult times at, 213, 214
economic denominator question and, 106
executive interviews at, 239
good-to-great performance of, 7
Hedgehog Concept and, 109–10
industry performance and, 252
“no miracle moment” in transition at, 170
technology applied by, 149–50
see also Mockler, Colman
Golden Key, 68
Goldman Sachs, 112
“good” performance, defined, 219
Good-to-Great study:
acquisitions analysis in, 241–42, 259–60
black box question and, 9–11
Built-to-Last study concepts and, 189–90, 197–206
CEO analysis in, 243–44, 249–51
comparative analyses frameworks in, 247–48
corporate ownership analysis in, 246
criteria for selection in, 219–27
cut 1 election criteria for, 220–29
cut 2 election criteria for, 220, 221–22
cut 3 election criteria for, 220, 222–26
cut 4 election criteria for, 220, 227
difficult times and, 213–14
direct comparison selection process in, 7–8, 228–33
executive churn analysis in, 243
executive interviews in, 239–41
financial spreadsheet analysis in, 238
frequently asked questions about, 211–18
industry analysis rankings in, 252–53
industry performance analysis in, 242–43
inside vs. outside CEO analysis in, 249–51
lack of high technology companies in, 213
media hype analysis in, 247
new economy and, 14–15
publicly traded companies in, 212
research steps in, 236–38
research teams assembled for, 5–6
role of board of directors and, 216

role of layoffs analysis in, 246
special analysis units in, 241–47
statistical significance of, 211–12
summary of concepts of, 11–14
technology analysis in, 247
unsustained companies in, 234–35
U.S. corporations in, 212, 221
Graniterock, 79–80
Great Atlantic and Pacific Tea
Company, see A&P
Great Britain, 73
greatness, question of, 204–10
meaningful work and, 208
“great” performance, defined, 219
Great Western Financial, 250, 255, 259
Doom Loop behavior of, 255
Fannie Mae compared with, 111–12, 113
Grundhofer, Jack, 43
Gulfstream, 132, 153



Hagen, Eric, 129
Hagen, Ward, 179
Halcion, 78, 256
“Hanoi Hilton,” 83
“hardiness” research studies, 82
Harris Corporation, 8, 153, 234, 235, 250, 260

in Doom Loop, 181–82
unsustained performance of, 257
Hartford, John, 67–68
Harvard Business Review, 236
Harvey, George, 134, 160
Hasbro, 8, 108, 234, 260
unsustained performance of, 257
Hassenfeld, Stephen, 108
“Hedgehog and the Fox, The” (Berlin), 90–91
Hedgehog Concept, 13, 90–119, 161, 184, 206
“best in the world” question and, 95, 96, 97–103, 118
clock building idea and, 200
consistency in, 123–24, 126
core competence and, 99–100, 118–19
core ideology idea and, 200
Council mechanism and, 114–16, 119
discipline and adherence to, 133–39, 142
diverse portfolio and, 215–16
economic engine question and, 95–96, 96, 104–8, 118, 119
of General Electric, 215–16
genius of AND idea and, 200
growth and, 112
as iterative process, 114–15, 114, 119

passion in, 96, 96, 108–10, 118
preserve the core/stimulate progress idea and, 200
simplicity in, 91–92, 94–95
technology and, 147–51, 153, 162
as Three Circles, see Three Circles understanding vs. bravado in, 110–17, 200, 202
Heinz, 227
Herring, Jim, 28, 68, 176
see also Kroger Hershey, 227
Hewlett, Bill, 191–94, 209
Hewlett-Packard, 6, 18, 54, 134, 166
core ideology of, 193–94
evolution of, 191–93
Hinge of Fate, The (Churchill), 65
Hitler, Adolf, 73, 154
Hlavacek, Jim, 27
Hoover Institution, 84
Hoover’s Handbook of Companies, 236
Hornung, Lane, 80
Household Finance, 43
Howard Johnson, 189
“HP Way,” 193
Huggies, 20
Hughes, 109



Iacocca, Lee, 29–30, 31, 131–33
Iacocca (Iacocca), 29
IBM, 70, 134, 158, 181, 254
I’m a Lucky Guy (Cullman), 34, 77
Industry Standard, 145
In Love and War (Jim and Sybil Stockdale), 84
Intel, 4, 6, 91, 166, 213
Intercom network system, 147–48
International Committee for the Study of Victimization, 82
International Directory of Company Histories, 236
International Harvester, 18
Internet, 134, 144–46, 148, 151, 158
Investor’s Business Daily, 29
Ironman (triathlon), 117, 127
Iverson, Ken, 34, 76, 139, 167, 177, 209

on hierarchical inequality, 136
Hlavacek’s description of, 27–28
on role of technology in success, 155–56
successor to, 213–14
see also Nucor



J. C. Penney, 46, 255
Jensen, Patty Griffin, 155
Johnson, Jim, 25, 152
Johnson & Johnson, 6, 134, 188

Jones, Chris, 159–60
Jones, Scott, 159
Jorndt, Dan, 32, 145
Joss, Bob, 43
Judd, Stefanie, 189



Kellogg, 227
Kelvie, Bill, 152
Kerkorian, Kirk, 30
Kesey, Ken, 41
Kimberly-Clark, 28, 32, 59–60, 62, 81, 86, 147, 160, 209, 255

in acquisitions analysis, 259
“best in the world” understanding of, 102
CEO analysis of, 249
comparison candidates for, 231
economic denominator question and, 106
executive interviews at, 239
Forbes on success of, 169
good-to-great performance of, 7
industry performance and, 252
“no miracle moment” in transition at, 170
in shift to paper-based products, 18–20, 94–95, 109, 141, 168–69
Smith’s tenure at, 17–21, 19, 59, 139–40; see also Smith, Darwin E. technology accelerator of, 150
Kleenex, 20, 102
Knight, Linda, 110
Kodak, 70, 254
Kroger, 8, 83, 86, 152, 172, 176, 209
in acquisitions analysis, 259
A&P compared with, 65–69, 66, 141
“best in the world” understanding of, 102
brutal facts confronted by, 65–69, 70, 81–82
CEO analysis of, 249
comparison candidates for, 231
economic denominator question and, 107
executive interviews at, 239
good-to-great performance at, 7
industry performance and, 252
“no miracle moment” in transition at, 170
rise of, 65–69, 66
scanning technology used by, 148–49
superstore concept and, 68–69, 94
technology accelerator of, 150
see also Everingham, Lyle; Herring, Jim



Lanier Business Products, 182
Larry King Live, 29
Larsen, Brian, 159
layoffs:

of executives, 53–54

in good-to-great study, 246
leadership, 31, 237

as “answer to everything,” 21–22
celebrity, 10, 12, 29–30, 39–40
charismatic, 72–73, 89, 216
in conducting autopsies without blame, 77–78, 88
dialogue, debate and, 75–77, 88
informal meetings and, 75
with questions, 74–75, 88
in stopping the flywheel, 181–82
see also executives; Level 5 Leadership
Level 5 Leadership, 17–40, 161, 184
alignment question and, 177–78
ambition for company and, 21, 25–27, 36, 39, 60
and assignment of credit and blame, 33–35, 39
board of directors and, 216
built-to-last ideas and, 198
clock building idea and, 198
core ideology and, 198
cultivation of, 35–38
culture of discipline and, 13, 130
as driven, 30, 39
duality of, 22–23, 36, 39
ego and, 12–13, 21, 22, 26, 27–30, 36, 39
genius of AND idea and, 198
“genius with a thousand helpers” compared with, 47
hierarchy of, 20
luck and, 33–34
modesty and, 27–30, 36, 39
personal humility and, 12–13
preserve the core/stimulate progress idea and, 198
prevalence of, 37
resolve and, 30–33, 36
technology and, 13–14
at technology companies, 216
from within company, 31–32, 40
Li, Eve, 30
Lincoln, Abraham, 22–23, 25
Litton, 70
Long-Range Profit Improvement Committee, 116
Lotus 1–2–3, 158
Luftig, Jeffrey T., 211–12



MacDonald, Ray, 130
McDonald’s, 126
McDonnell Douglas, 202
Mach3, 23, 106
McKinsey & Company, 1
Majors, Lee, 83

managers, see executives
Man’s Search for Meaning (Frankl), 120
Marine Corps, 51
Markham, Beryl, 1
Marlboro, 59, 108
Marriott, 189
Marx, Karl, 91
Maserati, 132, 153
Masters Forum, 154–55
Maxwell, David, 28, 62, 152, 172

Fannie Mae tenure of, 25–26, 45, 82–83
Maxwell House, 108
Meehan, Bill, 1–3
Merck, George, 1
Merck, George, 2d, 194
Merck & Company, 6, 31, 91, 99, 134, 150, 178, 179

philosophy of, 194
Miller, 108
Miller, Arjay, 43
Millhiser, Ross, 108–9
Mockler, Colman, 23, 28, 30, 31, 37, 38, 49, 57, 60, 216

in Forbes, 24–25
quality of life of, 61
see also Gillette
Monopoly, 108
Montgomery Ward, 74
Moody’s Company Information Reports, 57, 243
Morgridge, John, 216
motivation, 11, 207
brutal facts and, 73–74, 75, 89
Motorola Company, 6, 134



NASDAQ, 4, 173
Nassef, Dave, 51
Nation’s Business, 236
new economy, 14–15
Newell, 26, 131, 257
Newman, Frank, 43
New Republic, 236
Newsweek, 78
Newton, 158
New York Stock Exchange, 166
New York Times, 236
Norton Corporation, 189
Nuclear Corporation of America, 76
Nucor, 8, 27, 33–34, 78, 83, 86, 104, 167, 172, 177, 254

in acquisitions analysis, 259
“best in the world” understanding of, 102
CEO analysis of, 249

class distinctions at, 138
climate of dialogue and debate at, 75–76, 77
comparison candidates for, 232
compensation system of, 50–51
culture of discipline at, 136–39
economic denominator question and, 107
executive interviews at, 239
good-to-great performance of, 7
industry performance and, 252
management turmoil at, 213–14
in media, 167
“no miracle moment” in transition at, 171
technology accelerator of, 151
technology used by, 105, 155–56, 163
Three Circles of, 137
see also Iverson, Ken
“number one, number two” concept, 69n



Oliver, Barney, 192
Osborne (computer), 158



Packard, David, 1, 54, 191–94
Packard’s Law, 54–55, 192
Palm Computing, 158
Paragon mail processor, 134
passion, in Hedgehog Concept, 96, 96, 108–10, 118
Pepsico, 6, 227
Perelman, Ronald, 23, 24
Peterson, R. J., 182
Pfizer, 31, 150, 179, 256
Pharmacia, 31
Philip Morris, 8, 34, 61–62, 135, 255

in acquisitions analysis, 259
“best in the world” understanding of, 102
CEO analysis of, 249
comparison candidates for, 232
decision-making at, 60
economic denominator question and, 107
executive interviews at, 239
good-to-great performance of, 7
industry performance and, 253
international markets decision of, 58–60, 135
“no miracle moment” in transition at, 171
passion for work at, 108–9
perception of tobacco industry and, 109, 215
Seven-Up acquired by, 77, 135
technology accelerator of, 151
see also Cullman, Joseph F., III
Picasso, Pablo, 188

Pitney Bowes, 8, 51, 83, 86, 104, 160, 172
in acquisitions analysis, 259
Addressograph vs., 70–72, 71
“best in the world” understanding of, 103
CEO analysis of, 249
comparison candidates for, 232
culture of discipline at, 133–34
and economic denominator question, 107
executive interviews at, 239
good-to-great performance of, 7
industry performance and, 253
“no miracle moment” in transition at, 171
technology accelerator of, 151
see also Allen, Fred

Plain Talk (Iverson), 136
“Plastic People,” 43
Plato, 90
Pohlman, Marvin, 137, 177
Porras, Jerry I., 188
Postal Service, U.S., 133
preserve the core/stimulate progress, 198–200
Procter & Gamble, 6, 17–18, 20, 59, 80, 86, 134, 147, 169, 188, 255
Prodigy, 158
Purdue, Fred, 72



Radiation, Inc., 181
Rathmann, George, 120–23
“red flag” mechanisms, 78–80, 88, 199
Reichardt, Carl, 28, 42, 78, 97–98, 128, 171

see also Wells Fargo
Remington Rand, 158
Resisting Hostile Takeovers (Ricardo-Campbell), 216
responsibility, freedom and, 123, 124–26, 142
Responsibility Accounting, 123
Revlon, 23
Rexinger, Dan, 55
Ricardo-Campbell, Rita, 216
rigor, principle of, 54–60, 63
“rinsing your cottage cheese” factor, 127–29, 142
Rivas, Bill, 126
R. J. Reynolds, 8, 58, 59, 109, 215, 250, 259

Doom Loop behavior of, 135, 157, 255
Rogaine, 173, 256
Rosenberg, Richard, 43
Rubbermaid, 8, 132, 153, 234, 250, 260

Gault’s tenure at, 26–27, 130–31
tyrannical discipline at, 130–31
unsustained performance of, 257
Russell, Bertrand, 144

Salomon Brothers, 112
Sanders, Wayne, 81, 160
Sara Lee, 227
Scintillation Probe, 76
Scott, Dave, 127–28
Scott Paper, 8, 17–18, 20, 250, 259

Doom Loop behavior of, 255–56
Dunlap’s tenure at, 28–29
Procter & Gamble’s rivalry with, 80–81, 86
Scribes of Delphi, 90
Sea-Land, 135, 255
Security Pacific, 254
Semler, Bernard H., 123
Sensor, 23, 141, 149
Sensor for Women, 23
Seven-Up, 77, 135
short pay device, 79–80
Siegel, Sam, 76, 167
Silo, 8, 33, 106, 250, 259
Doom Loop behavior of, 55–56, 256
Simantob, Sina, 205
Sinclair, Alyson, 189
Singleton, Henry, 47–48, 258
Six Million Dollar Man, The, 83
Smith, Adam, 91
Smith, Darwin E., 17–21, 25, 28, 29, 30, 31, 32, 37, 38, 49, 59, 60, 81, 168–69
“stop doing” lists used by, 139–40
see also Kimberly-Clark
SmithKline, 178
Sony, 158, 188, 195
Stalin, Joseph, 154
Standard & Poor’s Analyst Handbook, 242–43, 252
Stanford University, Graduate School of Business, 43
Starbucks, 92
start-up companies, 120–21
Stockdale, Jim, 83–87
Stockdale Paradox, 13, 83–87, 99, 116, 146, 184
see also brutal facts
stock options, 49
“stop doing” list, 124, 139–41, 143
Strategic Thinking Group, 116
Stravinsky, Igor, 164
Strohmeyer, John, 138



Tandy, 94, 255
technology, 11, 105, 144–63, 184, 237

as accelerator of momentum, 152–53, 162
change induced by, 147–48, 155

clock building idea and, 201
core ideology idea and, 201
demise of Bethlehem Steel and, 156–57
excessive reliance on, 158–59
and fear of being left behind, 159–61, 162
genius of AND idea and, 201
good-to-great analysis of, 247
in good-to-great companies, 155–57, 162, 163
Hedgehog Concept and, 147–51, 153, 162
Internet and, 144–46
Level 5 Leadership and, 13–14
preserve the core/stimulate progress idea and, 201
as trap, 154–55
in Vietnam War, 158–59
Teledyne, 8, 234, 250, 260
Singleton’s tenure at, 47–48, 48
unsustained performance of, 258
Terry, Bill, 193
Three Circles, 94–97, 96, 118, 161, 184
“best at” question and, 95, 97–103
at Boeing, 204
clock building idea and, 200
core ideology idea and, 200
discipline within, 123–24
economic engine question and, 95–96, 104–8
failure to stay within, 134–36, 142
genius of AND idea and, 200
of Nucor, 137
passion and, 96, 108–10
preserve the core/stimulated progress idea and, 200
see also Hedgehog Concept 3M, 6, 18, 123, 134, 189
Time, 154
“title creep,” 139
Toblerone, 108
Today, 29
Truman, Harry S., 17
Tullis, Richard, 181–82



UCLA Bruins, 171–72
UNIVAC, 158
University of Chicago Center for

Research in Security Prices (CRSP), 221, 222
Upjohn, 8, 31, 78, 100, 141, 250, 259

Abbott compared with, 98–99, 173–74, 174
Doom Loop behavior of, 98–99, 256
U.S. Bancorp, 43
U.S. News, 236
U.S. Steel, 167

Van Genderen, Peter, 219
Velveeta, 108
Vietnam War, 83–84

reliance on technology in, 158–59
VisiCalc, 158



Walgreen, Charles R., III, “Cork,” 28, 32–33, 209
Eckerd compared with, 46–47
see also Walgreens

Walgreens, 6, 8, 32–33, 46–47, 92, 141, 152, 161, 209
in acquisitions analysis, 259
“best in the world” understanding of, 103
CEO analysis of, 249
comparison candidates for, 233
economic denominator question and, 107
executive interviews at, 239
good-to-great performance of, 7
Hedgehog strategy of, 92–94
industry performance and, 253
Intercom system of, 147–48
Internet threat to, 145–46
“no miracle moment” in transition at, 171
technology accelerator of, 151
transformation of, 3–5, 104–5
see also Walgreen, Charles R., III, “Cork”

Wall Street Journal, 18, 29, 110, 131–32, 236
Wall Street Transcript, 111
WalMart, 6, 147, 166, 195

evolution of, 190–91, 192
Walt Disney Company, 6, 134, 189

core ideology of, 195–96
Walton, Sam, 190–91
Wang, 181
Wards, 74
Warner-Lambert, 8, 250, 259

Doom Loop behavior of, 178–80, 256
Washington Mutual, 255
“weak generals, strong lieutenants” model, 43
Weissman, George, 58–59, 61–62, 108
Weissman, Paul, 189
Welch, Jack, 33
Wells Fargo, 8, 15, 45, 72, 78, 83, 104, 105, 172, 227

in acquisitions analysis, 260
Bank of America vs., 43–44, 44, 53–54, 86, 128–29
“best in the world” understanding of, 103
CEO analysis of, 249
comparison candidates for, 233
Crocker Bank acquisition and, 52–54, 254
culture of discipline at, 128–29

economic denominator question and, 107
executive hiring and transformation of, 42–44
executive interviews at, 239
good-to-great performance of, 7
Hedgehog concept of, 97–98
industry performance and, 253
“no miracle moment” in transition at, 171
technology accelerator of, 151
see also Reichardt, Carl
Westinghouse, 158
Westpac Banking, 43
West with the Night (Markham), 1
White, Blair, 81
Wilbanks, Leigh, 94
Williams, Joe, 179
Wolfe, Tom, 41
Wooden, John, 171–72
Woolpert, Bruce, 79–80
World War II, 73, 154
Wurtzel, Alan, 28, 33, 38, 166
Cooper compared with, 55–56
on hiring the right people, 57
as leader with questions, 74–75
see also Circuit City



Xerox, 70, 134, 254



Young, Amber, 159



Zeien, Alfred M., 109

Acknowledgments

To say this book is “by Jim Collins” overstates the case. Without the significant

contributions made by other people, this book would certainly not exist.
At the top of the list are members of the research team. I was truly blessed to

have an extraordinary group of people dedicated to the project. In aggregate,
they contributed something on the order of 15,000 hours of work to the project,
and the standard they set for themselves in the quality of their work set a high
standard for me to try to live up to. As I struggled with writing the book, I
pictured all the hardworking members of the team who dedicated months (in
some cases, years) to this effort looking over my shoulder and holding me
accountable, challenging me to create a final manuscript that met their standards,
worthy of their toil and contribution. I hope this effort meets with their approval.
Any failure to reach that standard rests entirely with me.

In addition, I would like to thank Denis B. Nock at the University of Colorado
Graduate School of Business, who was instrumental in helping me identify and
recruit the very best graduate students to join the research team. Getting the right
research team members on the bus was the single most important step in making
the project successful, and Denis played a singularly important role in getting a
whole busload of great people. Also at the University of Colorado, I am indebted

to Carol Krismann and her dedicated staff at the William M. White Business
Library, who patiently worked with members of the research team to locate all
sorts of arcane information. In addition to Carol, I would like to acknowledge
Betty Grebe, Lynnette Leiker, Dinah McKay, Martha Jo Sani, and Jean Whelan.

I am particularly indebted to a large number of critical readers who invested
hours in reading drafts of the manuscript and feeding me the brutal facts about
what needed to be improved. Yet despite sometimes searing (and always helpful)
feedback, they continually reinforced my faith in the potential of the project. For
their frankness and insight, I would like to thank Kirk Arnold, R. Wayne Boss,
Natalia Cherney-Roca, Paul M. Cohen, Nicole Toomey Davis, Andrew
Fenniman, Christopher Forman, William C. Garriock, Terry Gold, Ed
Greenberg, Martha Greenberg, Wayne H. Gross, George H. Hagen, Becky Hall,
Liz Heron, John G. Hill, Ann H. Judd, Rob Kaufman, Joe Kennedy, Keith
Kennedy, Butch Kerzner, Alan Khazei, Anne Knapp, Betina Koski, Ken
Krechmer, Barbara B. Lawton, Ph.D., Kyle Lefkoff, Kevin Maney, Bill Miller,
Joseph P. Modica, Thomas W. Morris, Robert Mrlik, John T. Myser, Peter
Nosler, Antonia Ozeroff, Jerry Peterson, Jim Reid, James J. Robb, John Rogers,
Kevin Rumon, Heather Reynolds Sagar, Victor Sanvido, Mason D. Schumacher,
Jeffrey L. Seglin, Sina Simantob, Orin Smith, Peter Staud-hammer, Rick
Sterling, Ted Stolberg, Jeff Tarr, Jean Taylor, Kim Hollingsworth Taylor, Tom
Tierney, John Vitale, Dan Wardrop, Mark H. Willes, David L. Witherow, and
Anthony R. Yue.

We were very fortunate to have the participation of executives instrumental in
the transformation at the good-to-great companies who patiently endured our
questions during one-to two-hour interviews and, at times, follow-up
conversations. To each of the following people, I would express my hopes that
this book captures the best of what you accomplished. Truly, you are the unsung
heroes of American business: Robert Aders, William F. Aldinger, III, Richard J.
Appert, Charles J. Aschauer, Jr., Dick Auchter, H. David Aycock, James D.
Bernd, Douglas M. Bibby, Roger E. Birk, Marc C. Breslawsky, Eli Broad, Dr.
Charles S. Brown, Walter Bruckart, Vernon A. Brunner, James E. Campbell,
Fred Canning, Joseph J. Cisco, Richard Cooley, Michael J. Critelli, Joseph F.
Cullman 3rd, John A. Doherty, Douglas D. Drysdale, Lyle Everingham,
Meredith B. Fischer, Paul N. Fruitt, Andreas Gembler, Milton L. Glass, James
G. Grosklaus, Jack Grundhofer, George B. Harvey, James Herring, James D.
Hlavacek, Gene D. Hoffman, J. Timothy Howard, Charles D. Hunter, F.
Kenneth Iverson, James A. Johnson, L. Daniel Jorndt, Robert L. Joss, Arthur
Juergens, William E. Kelvie, Linda K. Knight, Glenn S. Kraiss, Robert J. Levin,

Edmund Wattis Littlefield, David O. Maxwell, Hamish Maxwell, Ellen Merlo,
Hyman Meyers, Arjay Miller, John N. D. Moody, David Nassef, Frank
Newman, Arthur C. Nielsen, Jr., John D. Ong, Dr. Emanuel M. Papper, Richard
D. Parsons, Derwyn Phillips, Marvin A. Pohlman, William D. Pratt, Fred
Purdue, Michael J. Quigley, George Rathmann, Carl E. Reichardt, Daniel M.
Rexinger, Bill Rivas, Dennis Roney, Francis C. Rooney, Jr., Wayne R. Sanders,
Robert A. Schoellhorn, Bernard H. Semler, Samuel Siegel, Thomas F. Skelly,
Joseph P. Stiglich, Joseph F. Turley, Glenn S. Utt Jr., Edward Villanueva,
Charles R. Walgreen, Jr., Charles R. Walgreen, III, William H. Webb, George
Weissman, Blair White, William Wilson, Alan L. Wurtzel, and William E.
Zierden.

Numerous people from the companies in our research were enormously
helpful with arranging interviews and providing us key documents and
information. In particular, I would like to note Catherine Babington, David A.
Baldwin, Ann Fahey-Widman, and Miriam Welty Trangsrud at Abbott
Laboratories; Ann M. Collier at Circuit City; John P. DiQuollo at Fannie Mae;
David A. Fausch and Danielle M. Frizzi at Gillette; Tina Barry for her assistance
at Kimberly-Clark and her insights about Darwin Smith; Lisa Crouch and Angie
McCoy at Kimberly-Clark; Jack Cornett at Kroger; Terry S. Lisenby and
Cornelia Wells at Nucor; Steven C. Parrish and Timothy A. Sompolski at Philip
Morris; Sheryl Y. Battles and Diana L. Russo at Pitney Bowes, Thomas L.
Mammoser and Laurie L. Meyer at Walgreens; and Naomi S. Ishida at Wells
Fargo.

I would like to give special thanks to Diane Compagno Miller for her help in
opening doors at Wells Fargo, John S. Reed for his help in opening doors at
Philip Morris, Sharon L. Wurtzel for her help in opening doors at Circuit City,
Carl M. Brauer for his insights on Circuit City and generous sharing of his
manuscript, James G. Clawson for his Circuit City cases and insights, Karen
Lewis for her assistance with Hewlett-Packard Company Archives, Tracy
Russell and her colleagues at The Center for Research in Security Prices for their
diligence in ensuring that we had the most current data available, Virginia A.
Smith for her helpful guidance, Nick Sagar for key beta, Marvin Bressler for his
insight and wisdom, Bruce Woolpert for helping me to understand the concept of
mechanisms (and for his ongoing support), Ruth Ann Bagley for her diligent
proofreading, Dr. Jeffrey T. Luftig for access to his remarkable brain, Professor
William Briggs for his ability to break a complex problem into useful simplicity,
Admiral Jim Stockdale for his invaluable teaching, Jennifer Futernick for her
inspiration in creating the McKinsey salon that ignited this project, and Bill

Meehan for the initial spark.

I would like to make special note of Jerry Porras as my research mentor;
James J. Robb as my talented graphics consultant, Peter Ginsberg as my trusted
agent and fellow council member in the publishing world; Lisa Berkowitz, who
makes magic happen; and Adrian Zackheim, who has enthusiastically believed
in and supported this book from the moment he learned of it.

Finally, I am deeply thankful for my great good fortune to be married to
Joanne Ernst. After twenty years of marriage, she continues to put up with my
somewhat neurotic nature and propensity to become consumed with projects
such as this one. Not only is she my most helpful critic, but she is also my
deepest and most enduring support. The ultimate definition of success in life is
that your spouse likes and respects you ever more as the years go by. By that
measure, more than any other, I hope to be as successful as she is.

About the Author

JIM COLLINS is coauthor of Built to Last, a national bestseller for over five years
with a million copies in print. A student of enduring great companies, he serves
as a teacher to leaders throughout the corporate and social sectors. Formerly a
faculty member at the Stanford University Graduate School of Business, where
he received the Distinguished Teaching Award, Jim now works from his
management research laboratory in Boulder, Colorado.
Visit www.AuthorTracker.com for exclusive information on your favorite
HarperCollins authors.



Praise for Good to Great

“This carefully researched and well-written book disproves
most of the current management hype—from the cult of the
superhuman CEO to the cult of IT to the acquisitions and

merger mania. It will not enable mediocrity to become
competence. But it should enable competence to become

excellence.“
—Peter F. Drucker

“A book CEOs can’t wait to buy.”
—USA Today

“Collins and his research team have been tackling one of
the biggest questions business has to offer.”
—Fortune

“With both Good to Great and Built to Last, Mr. Collins
delivers two seductive messages: that great management is
attainable by mere mortals and that its practitioners can build
great institutions. It’s just what us mortals want to hear.”

—Wall Street Journal

“The difference is how hard Mr. Collins works to arrive at
his simple conclusions. They are based on years of detailed,

empirical research and are all the more powerful for
producing such unexpected results.”
—Financial Times

“The Business Idea of the Year.”
—Fast Company

“Collins again has written a book that seems built to last.”
—Business Week

Also by Jim Collins

Built to Last
(with Jerry I. Porras)

Credits

Jacket design by Chin-Yee Lai
Author photograph by Anne Knudsen

Copyright

GOOD TO GREAT. Copyright © 2001 by Jim Collins. All rights reserved under
International and Pan-American Copyright Conventions. By payment of the
required fees, you have been granted the non-exclusive, nontransferable right to
access and read the text of this e-book on-screen. No part of this text may be
reproduced, transmitted, down-loaded, decompiled, reverse engineered, or stored
in or introduced into any information storage and retrieval system, in any form
or by any means, whether electronic or mechanical, now known or hereinafter
invented, without the express written permission of HarperCollins e-books.

FIRST EDITION

Library of Congress Cataloging-in-Publication Data
Collins, James C. (James Charles), 1958–
Good to great : why some companies make the leap... and others don’t / Jim
Collins.—1st ed.
p. cm.
Includes bibliographical references and index.
ISBN 0-06-662099-6 (hc)
1. Leadership. 2. Strategic planning. 3. Organizational change. 4.
Technological innovations—Management. I. Title
HD57.7.C645 2001
658—dc21

2001024818

EPub Edition © 2011 ISBN: 978-006-211920-9

01 02 03 04 05 RRD 10 9 8 7 6 5 4 3 2 1

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